Facebook (FB) Price Channel

FB Red Price Channel is in its Critical Decision Wave

FB Red Price Channel is in its Critical Decision Wave

FB is in the critical decision wave of the red price channel within the navy rising megaphone.  This is the point where FB either breaks out into a melt-up channel or starts a channel top.

Sornette recently called a bubble on the FANG stocks.  60% of the time after a Sornette bubble call you’d see a crash of at least 20% within two weeks of the call.

That means FB could complete a fast top here (green scenario) before a crash to the bottom of the navy blue rising megaphone.

The 40% of the time Sornette bubble calls don’t play out as a fast crash, they either make a fast consolidation and break out into another melt-up (purple scenario), or they head into a longer-term consolidation.  The longer-term consolidation is typically a megaphone that keeps megaphoning long enough to produce a significant retrace of the bubble move (blue scenario).

DX Potential Price Channel

DX Price Channel

DX Needs a New Low within the Orange Price Channel to Confirm the Channel

DX needs a new low within the orange price channel to confirm the channel. If the channel confirms, it will be in the critical decision wave for starting a bottom vs. setting up a melt-down to the red megaphone bottom.

Roughly 2/3 to 3/4 of the time, the price would start a channel bottom.  That would put a bottom at roughly the red megaphone VWAP–the perfect place to start a new megaphone if the dollar is in a prolonged sideways move.

If instead the dollar breaks the orange price channel top by a little bit then puts in a new low, it will be forming a falling megaphone likely to bottom at the red megaphone VWAP.

The dollar is moving sideways across VWAP of a multi-decade megaphone.  It is likely to hang around this level for a looooong time.

Oil Price Channel

Oil is Working its Way Neatly Down the Blue Price Channel

Oil is Working its Way Neatly Down the Blue Price Channel

Oil is working its way neatly down the blue price channel. It’s either maxing out the channel waves before starting a megaphone bottom (green scenario) or its in the middle of a falling wedge (purple) or falling megaphone (orange) bottom already.

We’ll know which it is by when it first breaks the channel top.

Oil's Next Move Could Be to the Orange Megaphone Top or Oil Could Return to VWAP at 50 and Start a New Megaphone There

Oil’s Next Move Could Be to the Orange Megaphone Top or Oil Could Return to VWAP at 50 and Start a New Megaphone There

Oil has already done its job of confirming the orange megaphone by taking out the August 2, 2016 low.  It’s next move could go all the way for the orange megaphone top.  But oil could also return to the orange megaphone VWAP at 50 and start a new megaphone there.

If oil is going to go for the orange megaphone top, it will likely attempt a megaphone across 50 that breaks out in a Sornette melt-up set-up without a retrace to VWAP.

A series of megaphones inside megaphones across 50 would imply that oil is turning the inverse head and shoulders on the chart into either an inverse head and shoulders with a triangle right shoulder or a large triangle that will eventually break out downwards.

The inverse H&S with a triangle right shoulder is more likely, and would lead to a large move up on breakout.

SPY Small Price Channel Set-Up

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

SPY Price Channel in Rising Megaphone at Top of Larger Price Channel

Yesterday I posted a likely rising megaphone topping pattern (orange on chart above) on a year-long SPY price channel.

Today I wanted to show you a smaller price channel (orange) along the bottom of that orange rising megaphone.

SPY broke the top of that little price channel on June 2nd in the channel’s critical decision wave, where the price decides whether to break out into a melt-up or start a top.  SPY then put in a nice partial pullback into the channel.

Today SPY is poking through the channel top again.  This is where the melt-up set-up (green scenario) lives or dies.

SPY has to either get going screaming higher–and pronto–or it’s electing to form a channel top (purple or blue scenario).  The blue scenario should have been connected to the first purple wave down, not the second.  SPY could also form a rising megaphone or rising wedge for the little channel top.

Whatever little top the channel forms, it should also in the end work out to a head and shoulders top on the orange rising megaphone.